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Join The Dots (Cestrian Stocks Bulletin #71)

Cestrian Stocks Bulletin
Join The Dots (Cestrian Stocks Bulletin #71)
By Cestrian Capital Research, Inc • Issue #71 • View online
Apocalypse? Not Yet.

DISCLAIMER: This note is intended for US recipients only and, in particular, is not directed at, nor intended to be relied upon by any UK recipients. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Cestrian Capital Research, Inc., its employees, agents or affiliates, including the author of this note, or related persons, may have a position in any stocks, security, or financial instrument referenced in this note. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note’s date of publication and are subject to change without notice. Companies referenced in this note or their employees or affiliates may be customers of Cestrian Capital Research, Inc. Cestrian Capital Research, Inc. values both its independence and transparency and does not believe that this presents a material potential conflict of interest or impacts the content of its research or publications.
Fed Whispering
We are not averse to the apocalyptic here at Cestrian Towers. We don’t think the world is getting better. We don’t think tech companies are “for good”. We don’t think that the rise of protectionism is likely to lead anywhere wonderful. And we don’t see the Dreamtime of the post-WWII era coming back anytime soon.
We do, however, think that stonks mainly be going up. We’ve said this since we called the bottom in March 2020 with about 3 days’ error.
Here’s what we said to our Growth Investor Pro subscribers on March 26, 2020.
Actual shot from actual post in March-20
Actual shot from actual post in March-20
When you had the whole of DC on TV saying, don’t worry hedgies, er we mean, don’t worry America, the market will be fine because we will do absolutely anything to keep the market up? It wasn’t so hard to say, Buy.
And a few weeks later when the Speaker of the House went on CNN of all places and said, and we almost-quote here, “well, now we know the market has a floor”, referring to SPY220 where the market bottomed out? We felt fairly secure in our Buy Bigly call.
You know what’s been tough? Not 2020. 2021. 2021 has been tough. First up, the whole of tech swooned in March after first hitting all time highs in February. Then, just as you thought it was going to be OK, it hit the deck again in May, hard. Normally unswervable in our commitment, we can point to one shameful May 2021 cope-post in that same Growth Investor Pro service when we said, hm, this be getting rough, may have to bail out to like 20% cash soon. Fortunately the market was so bad that day that it was plain funny and everything was so absurdly cheap that we didn’t sell, got over ourselves, and have happily leaned Portnoy ever since, to the benefit of our brokerage accounts and future retirements.
You know what kept us safe this year, taking us to new highs in the picks in our pay services? Yes yes, we can spot a good company at 1000 paces, we can read a chart pretty good, and we never bet the farm, usually manage risk, all that, you know, the day job. But over and above that - we had a Fed-whisperer in our midst.
Specifically, we have a subscriber, runs the Federal Reserve channel in our free grownups-only stocks board, Cestrian Stock Symposium. Knows their stuff on the rates side. Used to trade ‘em for a living, now does something more relaxing as a result of all that trading. And their line all year has been: taper? What taper?
In short - our in-house view on Fed matters all year has been that the Fed will ease not harm equities this year.
When the 10-year bond yield shot up to 1.75%, the market said that the Fed will be forced to taper and raise rates imminently due to high inflation data. However, our Fed Whisperer believed the conditions for tapering were still unmet, as inflation was likely transitory and the labor market conditions were not strong enough yet, predicting tapering to be Q4 or Q1 22. No doubt our Whisperer will be wrong one day. But in 2021 to date? Hit it out of the park.
Want to get the benefit of minds like this, for free? Sign up for Cestrian Stocks Symposium. Runs 24/7 on Slack, works great on any device. Easy to use. Simple rules - (1) Keep It Clean, it’s a family show; (2) Leave Your Personal Politics At The Door; (3) There Is No Such Thing As A Dumb Question.
So far the service features a lot of people all helping each other. We say people. Could be bots. Hard to say. But so far, no descent into Lord of the Flies type stuff. No user yet ritually disposed of nor consumed. Nobody stock-shamed. NO ALL CAPS OR YELLING OR PERSONAL INSULTS ABOUT YOUR MOTHER. Just great content, great ideas, fulsome discussions, and supportive folks helping each other. Yes, this Stonks Utopia does sound too good to be true, but for now, that’s how it is, so, join us!
Sign up - free - here:
See you there!
Cestrian Capital Research, Inc - 22 September 2021.
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